A2 Milk has a competitor?! Nestlé announced the launch of A2 baby milk powder!
In fact, Nestlé’s addition of A2 milk powder has something to do with the rapid development of a2 milk (ASX:A2M) (hereinafter referred to as A2M) in recent years.
In 2013, a baby formula milk powder called a2 milk began to appear on the online shopping platform's Australia and New Zealand purchasing list. The product claims that it containsType A2 proteinBetter than the current mainstream A1 protein milk powderRelieve gastrointestinal discomfort caused by lactose intolerance.
It is understood thatConsumers around the world have lactose intolerance, and it is more common in Asians, So that A2 milk powder quickly became red.
According to the data, A2M's fiscal year 2018 revenue was 9.22 million New Zealand dollars, an increase of 68% year-on-year, while its net profit after tax was 1.96 million New Zealand dollars, an increase of 116%. A2M officially announced that Australia and New Zealand is still A2M's core sales market, and its performance is still strong, with continuous growth.
In fact, as early as April this year, Nestlé launched an A2 infant formula in mainland China. This product only contains A2 protein instead of the A1 protein and A2 protein contained in traditional milk.
Affected by this, A2M's stock price fell by more than 12% in the following week.
Mark Brown, chief investment manager of Devon Funds, a New Zealand investment company, pointed out that A2M's success lies in its creation of a product with almost no manufacturing investment, and a brand whose marketing costs only account for 8% of sales. However, the reality is that about 40% of all New Zealand dairy cows do not contain A1 protein, and the cost of producing a liter of A1 protein-free milk will not exceed the cost of producing alternatives.
It is possible for Nestlé to expand the A2 dairy market, but it is also possible thatIf there is no patent protection, its uniqueness will be eroded as the commercialization of A1 protein-free. Either way, as competition intensifies and marketing costs increase, the future of A2M looks more difficult.
As A2M is now the largest listed company in New Zealand and its PE is 45 times the profit this year, New Zealand investment company Devon Funds will continue to monitor the company's situation closely. The company estimates that more than 2% of A80M's stock market value is based on its sales of infant formula milk powder in China, so this market remains the key to its business.
Although after the sharp drop in stock price in March this year, a2 milk company stated that its sales growth in the vast Chinese market has not been affected by the launch of new products by competitors, the stock price trend of a2 milk directly reflects its market performance.
It can be seen that in the past six months or so, A2M's stock has been turbulent and abnormal compared with the previous period. It has dropped from A$13.1 per share (2018.03.21) to A$9.58 (2018.10.17) from the high point six months ago. A decline of 27%.
It can be seen that in the stock market, in addition to the announcements and financial information of the listed company itself, the sales of products, and even the dynamics of the industry itself and competitors, can profoundly affect a company's stock price and prospects.
Therefore, as investors, there are many factors to consider when making investment decisions.
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Source of information: The stock information in this article comes from the official website of the Australian Stock Exchange (ASX) and 61 Australian Shares Information Platform (www.61financial.com.au). The news content of this article is integrated interface news, Australian Chinese Network, 1688 Australian News Network.
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